Palantir Stocks Decline 4.36% Guidance Requires Another 15% Sequential Revenue Step

What happened

Palantir reported third-quarter revenue of $2.313 billion, up 96% from a year earlier, and gave fourth-quarter revenue guidance of $2.649 billion to $2.653 billion. Its shares fell 4.36% to $167.75 at 9:32 a.m. ET on November 4.

Confirmed

Global impact / market context

The fourth-quarter revenue midpoint requires about 14.6% growth from the third quarter, so falling short could weaken revenue expectations and the investment case. Guidance also implies an adjusted operating margin near 61.9%, but that measure excludes equity compensation and related payroll taxes.

Analyst inference

The article describes a gap between fast reported growth and investor expectations: shares declined despite the earnings release and higher targets. The stated revenue hurdle is substantial, though its required sequential growth would be slower than the 20% growth just delivered.

Analyst inference

What to watch

1. Compare reported fourth-quarter revenue with the $2.649 billion to $2.653 billion guidance range; a shortfall would indicate the demanding sequential growth target was not met. Analyst inference
2. Assess whether adjusted operating income reaches management's guidance, while remembering this measure excludes equity compensation and related payroll taxes. Analyst inference
3. Track cash generation and the effect of equity compensation on shareholders, since the article says both matter to whether operating gains translate into shareholder value. Analyst inference

Evidence

• gurufocus.com